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tv   First Business  KICU  January 10, 2014 4:00am-4:31am PST

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on this jobs friday-- why more americans are feeling confident about quitting their jobs. in today's cover story....the big payoff for the new college playoffs.. might not over.. why those high flying airline stock could climb higher. plus... is marijuana the new smoking hot place to invest? the debate lights up in traders unplugged... first business starts now! good morning! it's friday, january 10th. i'm angela miles. in today's first look: it could turn out to be a fierce friday! traders anxiously await the latest news on the job
4:01 am's expected 200,000 people were added to payrolls and the unemployment rate will remain unchanged at 7%. the market was eerily quiet yesterday ahead of the jobs numbers.. with the dow , nasdaq , s&p gold and oil not straying far for the flat line. alcoa had an earnings miss-- signaling what could become a rough start to earnings season. and are fortunes turning around for abercrombie and fitch? hares jumped 15% last night in heavy volume after the retailer raised its outlook. based on strong sales at the end of the year.. charles moon from trading advantages good to go this morning to talk with us about the jobs number expected today. 200 thousand jobs expected to be added to payrolls. so charles, what do you think here? > > i expect, you know, you look at the adp as a precursor to the nonfarm and the adp beat was pretty decent so i expect the same. i expect a beat on non-farm. as far as in relation to the market we'll see how
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that really translates. we press lower off the adp news and that forms c minutes. so we'll see if that's the same type of reaction. it's been a mixed bag as of late. reaction has been, frankly, bouncing back and forth so we'll see how the market will react off of the news early on. > > well the market was definitely reacting to news from el quoa's earnings after the close last night. that stock selling off after an earnings miss. will that be a predictor of what happens in trading today? > > it really could be. it wasn't- it was a mixed bag as far as earnings went. they missed on the eps by a few cents but they beat on revenue, and it's really going to be determined on how their forecast is going to be. i believe it's expected around 7% growth. they did warn early on in 2013 that over the next 10 years they see a global slowdown for aluminum demand, but that's changed recently. they still expect that. the short term aluminum demand is going to be there. a lot of it's going to be tied in with the chinese economics. if this is a precursor so to speak as far as how the rest of the eps reports are going to come out through the earnings season, we can see
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a downdraft in the market absolutely. > > thank you for that charles. in a sign american's are feeling more confident about the labor market... more americans are quitting their jobs. in october alone 2.4 million people resigned. that's a 15% increase from last year. analysts closely watch the number of people giving up their jobs because it correlates with how confident they are about their prospects of getting hired. here's chuck coppola with the latest on the debate over unemployment benefits. angie, senate negotiators are still in talks to extend expired employment benefits for millions of jobless americans. the campaign was put on hold earlier in the week while lawmakers look for ways to pay for the estimated $18 billion it will cost for an extension. options include spending cuts and tightening requirements for benefit recipients. democrats have been pushing for a one- year extension. republicans say they would go along with a three-month renewal, but only if the costs were covered. president obama is in the zone. at a news conference the president unvieled details of his promse zone project meant to improve the economic status of low income americans. the presdient says it's not your typical government handout. and instead cuts the red tape and streamlines federal funding along with combining support
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from agencies such as the education deparment for job training. the government does not have all the answers, no amount of money can take the place of a loving parent in a childs life, but i did learn that when communities and governments and businesses and not for profits work together we can make a difference. florida senator marco rubio responded saying the president has the wrong focus. i am proposing that we turn over washington's anti-poverty programs - and the trillions spent on them - over to the states. the first 5 promise zones are san antonio, philadelphia, la, southeastern kentucky and the choctaw nation of oklahoma and will expand to 20 regions in the next 3 years. consumers are still holding back on spending, according to the latest third-quarter earnings reports. family dollar shares are sinking after the discount retailer reported weaker first-quarter same-store sales and cut its outlook for 2014. it also lost its chief operating officer, michael bloom, who resigned. meanwhile bed bath and beyond stock is falling fast on weak earnings and a lowered outlook. early in the day the stock hit its short- sale circuit breaker - or the
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point at which there is a ban on short-selling after a stock has dropped a certain amount. taxing times at the irs. a spokeswoman tells congress the agency is teetering on the brink of collapse. between budget cuts and years of underfunding-- the irs needs a major cash infusion. the agency warns its unable to keep up with calls from taxpayers--answering only about 60% compared to 87% a decade ago. jp morgan is exiting its prepaid card business, saying it is too risky. the bank offered the cards with cash and treasury services to companies and governments. last month hundreds of thousands of cardholders were warned their information may have been hacked. jp morgan has been trying to simplify operations after regulators found deficiencies in its risk controls. u.s. banks continue to pump up the profits despite paying billions for breaking laws. bloomberg news finds 6 firms combined paid more than $18 billion for claims of breaking rules. at the same time however, bank incomes shot up 21% to $74
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billion. that amount is only rivaled by 2006 when major banks reaped $84 billion. banks are making money through the stock market, cost cutting and a declines in bad loans. in her first comments since being confirmed as the next chairman of the federal reserve, janet yellen told time magazine that she's hopeful that this year, gdp will reach three percent, that inflation will move back, closer to two percent and that she expects further recovery in the housing sector. yellen defended the fed's quantitative easing program for holding down long- term interest rates to encourage spending. as housing and stock prices rise, she says it encourages spending and job growth. yellen described dodd- frank banking reforms as a good road map but that further steps may be needed. overseas... the president of the european central bank is using strong language about stimulating "that" economy. mario draghi said at a news conference yesterday-- the ecb remains "determined" to maintain a high degree of monetary accommodation. and,
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will take further action if required, while keeping interest rates low. draghi points to improvements in the financial market as proof the eurozone is recovering from the recession. a flood of new fleet! airlines are buying more new jets than ever before. brand new models from boeing and airbus, are now rolling onto the runway. delta says the latest planes will have bigger seats, and outlets for flyers, as it retires aging planes. meantime, passenger traffic popped in december, thanks to holiday travelers. yesterday, american airlines shares picked up 6% due to last months data. delta gained 4%. ford is kicking it up a notch. shares bounced 2% as the automaker came out with plans hike its dividend by 25%. it's second increase in two years. ford has an ambitious plan to release 23 redesigned vehicles worldwide, open 3 new plants and add roughly 5,000 jobs this year. investors have been warned that profits will likely fall due to the investments. blackberry is clinging to keyboards. ceo john chen told reporters at the consumer electronics show in vegas yesterday, his plan is to keep keyboards in future designs of blackberry smartphones. chen
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also plans to lure back corporate and government customers that once made blackberry popular. blackberry is going as far as to sue the maker of a snap-on keypad for the iphone, because of its similarity to blackberry products. the government hopes new mortgage rules will cut down on shady lending practices. the new rules go into effect today. beginning with "qualified mortgages" --consumers need to prove they can afford to pay back loans. homebuyers deep in debt or self employed should expect to provide more financial evidence in order to lock down loans. the mortgage rules that go into effect today are designed to fight the excess of the last housing bubble. they are designed to discourage banks from making the kinds of toxic mortgages that we saw several years ago, even though they aren't the kinds of mortgages that banks are making today. that was jed kolko of trulia. he believes the new rules will not effect the availability or cost of getting
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a mortgage. commodities traders will keep a close watch on a crop report out from the government today. final crop estimates are due out this morning from the department of agriculture. already, bloomberg reports that corn supply in the u.s. is at its highest since 1994. however, jack scoville of price futures group explains fewer exports and lower feed production is pushing down demand. it's really kind of created this idea of a big over supply, as we go through the year, corn prices have been falling as a result. we're dangerously close to going under four dollars now. scoville adds the slide in crop prices could eventually be present at the consumer level, but only after production of pork or beef increases. diamond foods gets a ding. the snack company known for its nuts and chips will pay for its role in an accounting scandal. diamond will pay the sec a $5 million dollar fine. the sec is charging top executives at the
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san francisco based company with falsifying walnut costs to boost earnings. so far no one is admitting or denying the allegations. former enron ceo jeffrey skilling is on the move. he's spending the rest of his reduced prison sentence in a minimum-security prison in montgomery, alabama. skilling was convicted in 2006 for his role in enron's collapse. with time off for good behavior, skilling could be out of jail in 2017 after serving just 10 years of his 24-year sentence. beleagured baseball player alex rodriguez will likely cover his bases on his next career move following allegations of performance enhancing drug use. a ruling on a-rod's appeal of his 211 game ban is expected soon. leaving the player to decide whether to accept a suspension or fight on.. a court battle could cost an estimated $10 million. not playing will could be double that amount. sources tell espn he may go for a reduced ban. college football's bowl championship series will tranform next season, into a four-team playoff, followed by a championship game. it may bring about fewer disputes as to
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which team is really the nation's best. and as our cover story explains, it's expected to at least double the hundreds of millions of dollars in revenue the old bcs brought in. for those who thought the bcs system was too arbitrary and prone to favor teams with national followings, college football will impliment a playoff system. four of nation's best teams will pair off. two in the sugar bowl new year's eve. two more new years day in the rose bowl. the winners to face each other two weeks later. for espn, it'll be a monster. they'll own new year's eve and new year's day. and two weeks later they'll own it right back. the playoff games will rotate to other venues each year. in 2016, the orange and cotton bowls will host the playoffs. for sponsors and media, the addition of these playoffs will mean more revenue--a lot more. it'll go from 15 to 30 million. the return on investment can be substantial. in 2012, allstate paid 17-and-a-half million dollars to sponsor the sugar bowl and bcs championship game. adweek calculated that the buy generated $28 million in value
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for allstate. but what about the universities? the five conferences you see on your screen will split 71-and-a half-percent of the revenue after expenses. five smaller conferences will split 27% of the revenue. but some have questions about the distribution of the money. the money will go to the coaches, to the conferences and athletic departments. to the players, nothing, to the english department, nothing. still to come: the side effects of owning a high flying pharma stock in chart talk... plus...a game of "which stock would you rather" in traders unplugged and... what prompted the labor market to hit the brakes on layoffs... that's coming up with bill moller!
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th a deadly disease. i was one of them. i'm a nurse and i knew how damaging the disease was to my life. nothing i tried seemed to work. my brother died. from complications of the exact same preventable disease and i knew i had to do something to get healthy. my disease was obesity and after consulting with my doctor, i received the effective treatment i needed. obesity is a second leading cause of preventable death in the united states. but it's a treatable disease, and there's effective treatment options available. now is time to get help. please join the obesity action coalition and acknowledge obesity as a disease for acceptance, for access to all effective treatments, including diet and exercise, pharmacotherapy and weight-loss surgery for obese adults with at least one obesity related comorbid condition. visit obesity action dot org and sign an open letter pledging your support and for more information about how to talk to your doctor about your weight and your treatment options. together we can make a choice to end obesity now.
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a public service from the obesity action coalition.
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well later this morning we're going to get the official report on the number of jobs created last month. well there's also a new report just out on the number of layoffs in december - which happened in fact to be the fewest in 16 years. that report compiled by the outplacement firm challenger, gray & christmas. jim pedderson is with that firm. now that's kind of the opposite of we usually hear in december. > > that's correct usually december is one of the highest job cut months of the year. in the past and the past four or five years, since the recession, it's been among the lowest- lower than the annual average. > > what accounts for this? > > well it could be a couple things: companies may be deciding to lay off fewer people around the holidays but also since the end the recession every year has been stronger than the last so they're going into the new year with more
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confidence and they want to go in with their full work force. > > fewer layoffs, but that doesn't mean no layoffs because this week we heard from macy's that this month they will be letting go about 2500 people. > > retail has been one of the struggling industries still. it's ranked fourth behind financial services, health-care and industrial goods. > > so as were standing here at the beginning of 2014 it probably looks pretty good for the overall economy and that might very well be reinforced when we get the bureau of labor statistics numbers out what it a few hours. > > definitely layoffs are a good indicator of what's happening down the road- six to 12 months down the road. > > jim patterson from challenger gray and christmas, thanks so much. > > thank you very much. thank you bill! coming up.... what led shares of one pharma stock to quadruple this week? find out in chart talk. and.. something special is in the our traders attempt to make money on marijunana. keep it here...
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you are in for a treat today..
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joining us from the floor of cme group... for traders unplugged alan knuckman and james ramelli. ready to rumble on our show. good morning guys. let's start with a new gold standard. gold had a deficit last year. so what gives with gold? alan: first time in 13 years that gold is actually negative on the season. i liked it last summer, i liked it last fall, i like it even better now. swiss national bank lost $10 billion because they didn't hedge their gold position which i think number one is stupid, but that's a sign that usually kind of bottoms get put in when you see those capitulation type news stories where people can't take it any wonder. james: right, and you know we've seen that a of couple times over the last year though and yet the price action has continued lower. so i'm not quite ready to jump in at these levels yet. i think there is some more downside here. you know if i were looking to get long, i definitely would not be doing it unhedged. i would definitely look to collar this off, you know, selling up-side calls to buy down-side puts while owning the underlying. great way for me to stay protected if i wanted to get long at these levels. alan: a lot of upside after this
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big sell-off from 1900! angie: topic no. 2: retail wrecks. is sears the new jcp? which stock would you own? james: i wouldn't own either of them. aland: you've got to pick one! the question she asked was which one would you pick? james: i would be looking to short shield and buy jcp only for the fact that sears has a lot more way to go to the downside here and i think j.c. penney has kind of put a bottom and might go bankrupt this year but risk vs. reward that is the best way. alan: short squeeze from 40 up to 65. it was one of the leading short stocks and went all the way to 65 now were back to 40 now. to short here, i think you're hard-pressed that yes- this was a $25 stock in 2008 or so, but 40 has been a very important support level for the last two years. that's a level from the risk/reward. don't risk a whole lot- maybe $35, but i think there's some value here because so many people are in negative, so many people are short and look even how you saw j.c. penney have a bit of a come back. you know retail is not dead. this internet thing may just be a fad. angie: topic number three: record high. now that marijuana is legal in states such as
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colorado. which stock would you inhale? alan: oh that hurts. i don't know. i come from the peter lynch school of know the market that your investing in. i really don't know. my play is there's a hedge fund that's looking to develop here for the high times a fund that's going to help out these guys because they can use the bank's, so i would be looking at an equity firm that might be behind some of these funds. goldman sachs the type of people that would help these folks out. goldman sachs could easily get to $200. a lot of upside in goldman sachs. james: right, so i looked at some surveys here that shows that 55 percent of americans support the legalization of marijuana and actually have a very good stock here. njna and medical marijuana inc. they're very much involved in the business of providing the products to the dispensaries in colorado and providing a lot of support services to businesses that are offering both medical and recreational marijuana in the states. i think there's a huge opportunity here if other states go the route of legalization. alan: wine, cigarettes, coffee who cares. angie: and your bonus round question this morning: we are high on stocks. which ones hit new highs this year? etna, direct tv, facebook, or macy's? aland: the answer is going to be all of them. that's always the answer: all of them. i've got this game figured out. angie: it's all of the above. i was hoping to trick you on macy's. you did not fall for it. i have to find some new material. james: i almost fell for macy's. thank you.
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talking to veterans about the real issues they're dealing with can be awkward and uncomfortable. we think to ourselves, "i never served. how could i understand? they'll talk about it when they're ready." and then we wonder why they don't want to talk. but when their behavior changes, when they withdraw to themselves,
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increase substance use, or even talk about hurting themselves, it's time to act. because if we don't, our families and relationships will suffer. ask the hard questions. listen to the veterans in your life and show you care. make the call. it matters. when you recognize a veteran is in crisis, call the veterans crisis line at 1-800-273-8255 and press "1". joe kinahan of td ameritrade joins us now. he's here to talk about one of the most exciting stocks of the year so far. it is intercept pharmaceuticals. good morning joe, the stock was up more than $200 yesterday. > > well i'll tell you what, angela, it was a lot of fun to watch this one and you know the end result of why they're up so
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much is really really good news. they seem- their test had gone positive for something called, nash. it affects over- estimates are up to 12% but up to 10 percent of the u.s. population can lead to a cirrhosis of the liver and even death so besides the stock being fun and exciting, this is exciting news for many people in the u.s. population. > > does the stock to have any more room to run, joe? > > well we'll have to see how the next round goes. as you and i both know angela we've seen this many times in our career where there so much excitement originally and unfortunately sometimes down the road things can happen. what i would say to people is that if you have had this stock for the last few days, you've enjoyed some profits you really might want to consider taking some of it off. and for those of you who are day traders, there's some exciting trade here. and for the investors, i would think you would want to keep it really tight in terms of stops with the center and be ready to
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be in and out because i don't see a reason for the volatility to slow down over the next few days. > > i also want to ask you about the airline sector because this has been a highflier this year already as well. > > yeah, it really has. traditionally airlines has been a really tough business. we saw some upgrades including united airline's got one yesterday morning and with that also what's helping them so much angela, is the falling fuel prices- they become more efficient- now we know they had a little bit of a hiccup last week with some of the bad weather but again it was just a hiccup and will soon be forgotten. overall the sector seems to be a really really good and one that's been beat up over last couple of years. so again one that i think investors should keep their eyes over the next six months or so. you like the airlines good to have you on the show this morning joe, take care. > > thanks angela, have a great day. that's a wrap for this week.. coming up on monday-- hints on stocks and sectors that could be market movers this earnings season. we hope you will join us. from all us at first business have a great weekend!
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